OLA Energy which runs a lubricant blending plant in Mombasa has decried high import duty charged on raw materials in Kenya, making its products uncompetitive in Africa.
According to the firm, Kenya charges 10 per cent while in other African markets, the materials are duty free.
In a media statement, OLA Energy, Global CEO Mazin Binramadan said it is very expensive to export lubricants to other countries like Ethiopia, Congo, Tanzania, Malawi, Zambia and Zimbabwe due to stiff competition from other countries namely Egypt, India, United Arab Emirates and South Africa who benefit from duty free manufacturing and other subsidies.
“If base oils and additives are made duty free, Kenya will become more competitive in domestic markets and subsequently reduce the incentive for smuggling products into the country,’’ Binramadan said.
He gave Ethiopia as an example, saying despite close proximity to Kenya, the country imports these items from Morocco due to high costs in the local market.
His sentiments were echoed by OLA Energy Kenya managing director Millicent Onyonyi who said, while the firm appreciates the government’s effort to streamline the energy sector by eliminating illegal Liquid Petroluem Gas refillers through policy reforms, more needs to be done to eliminate bottlenecks affecting the lubricants segment.
OLA Energy is currently undertaking a change of its retail visual identity across the country.
